Key Takeaways
- A man claims his ex-wife stole $200 million in Bitcoin using access to his wallet’s recovery phrase.
- Experts say the method is possible and likely involved basic credential theft, not advanced hacking.
- The case highlights gaps in U.K. law and rising risks of crypto theft targeting individuals.
A London court case in which a man accuses his ex-wife of orchestrating the theft of more than $200 million in Bitcoin is spotlighting both the vulnerabilities of personal crypto storage and gaps in how English law treats digital assets.
Now heading toward trial in the High Court, the dispute raises questions not only about whether such a theft is technically plausible, but also about whether existing legal frameworks can handle it.
Alleged Bitcoin Theft and Legal Dispute
Ping Fai Yuen has sued his former wife, Fun Yung Li, alleging she accessed and transferred more than 2,300 Bitcoins from his cold wallet without his consent.
Bloomberg reported that Yuen claims Li worked with a third party to obtain the credentials needed to access the wallet and move the funds beyond his reach.
The Bitcoin has been valued at as much as £180 million ($238 million) since the litigation began, according to a High Court ruling published in March.
Court filings show the alleged method relied on access to the wallet’s recovery phrase. This sequence of words can recreate the wallet.
Yuen claims Li used CCTV cameras in their home to capture this phrase, enabling the transfer of the assets without needing the physical device.
Li is accused of moving the crypto through a series of transactions, distributing it across dozens of blockchain addresses.
According to court records the crypto has remained untouched in those addresses since late 2023.
Yuen said he learned of the alleged activity after his daughter alerted him.
He later installed recording devices in the home, which his lawyers say captured Li discussing how to move large sums of money and navigate financial scrutiny.
Li, who now lives in Hong Kong, has denied the allegations. The judge described her court filing as a “bare denial.”
The dispute also has a criminal dimension.
The court said Yuen assaulted Li after discovering the alleged transfer and later pleaded guilty in 2024 to assault occasioning actual bodily harm and two counts of common assault.
Legal Grey Area Around Crypto in UK Law
The case also exposes unresolved questions in English law over how it classifies crypto — and what legal remedies are available when it is allegedly stolen.
Judge Barry Cotter ruled that Yuen cannot pursue a traditional “conversion” claim — a legal route typically used when someone wrongfully takes physical property.
This is because current English law does not consider Bitcoin and other digital assets to be tangible property.
That distinction leaves claimants in a difficult position.
While assets such as cash, watches or artwork can form the basis of straightforward recovery claims, cryptocurrencies fall outside those established categories, limiting the legal tools available.
The ruling comes despite recent efforts to modernise the legal framework.
The U.K. recently introduced the Property (Digital Assets etc) Act last year to recognise digital assets more formally, but the legislation did not resolve how existing property-based claims should apply in cases of alleged theft.
During hearings, Yuen’s lawyers pointed to rulings in jurisdictions including Canada, New Zealand and parts of the United States, where courts have been more willing to allow civil claims over stolen digital assets.
Cotter said the case could provide “fertile ground” to address the gap. This allows the claim to proceed under alternative legal arguments that may still enable recovery.
Is the Alleged Bitcoin Theft Technically Plausible?
Cybersecurity experts say the scenario described in court filings — while unusual — is entirely feasible and does not require sophisticated hacking of blockchain systems.
“When we think of hacking, we often think about the covert entry into a system,” said Jeff Watkins, Chief AI Officer at NorthStar Intelligence.
“However, with cold wallets, one does not need access to the wallet itself to drain it of cryptocurrency, since the wallet can be recreated.”
Watkins explained that possession of a wallet’s recovery phrase, typically a sequence of 24 words, is enough to regain full control.
“If this is all true, this hack is not a breach of the blockchain or wallet, but rather the misuse of a feature combined with insufficient extra controls,” he said.
“This is a simple case of credential theft, no different from a family member taking a physical notebook full of passwords from your desk.”
Nathan Davies-Webb, a consultant at Acumen Cyber, said the alleged use of cameras to capture sensitive information is consistent with known attack methods.
“The irony is with the nature of crypto, the transfer is very public information, but the initiator isn’t,” he told CCN. “You don’t stop somebody recording you.”
He added that attackers often exploit human behaviour rather than technical flaws. “
It may have been even simpler; the wife is alleged to have used a camera to record login information — a technique which is likely to have worked across multiple platforms.”
Preventing the Theft
Experts say the case underscores basic — but often overlooked — security practices for crypto holders.
“Treat your seed phrase and any other pass phrases as the crown jewels,” Watkins said.
“Never enter them in front of cameras, use them on unsecured connections, store them on internet-connected devices, or leave them somewhere another person can easily access.”
He added that for large holdings, additional safeguards are essential.
“Layered controls, such as an additional passphrase or multi-signature custody, should have been in place to prevent such events.”
Davies-Webb also pointed to stronger authentication practices.
“You use one-time passcodes or push notifications in apps that support biometrics and do liveliness checks, so it can’t be replayed,” he said.
Rising Bitcoin Theft Targeting Individuals
While large-scale hacks of crypto firms dominate headlines, attacks on individuals are worryingly becoming more common.
Research cited by the BBC shows that incidents targeting private investors have doubled in recent years, rising from around 40,000 cases in 2022 to 80,000 last year.
These attacks — including hacking, scams and coercion — accounted for an estimated $713 million in stolen crypto.
Unlike traditional banking, victims often have little recourse.
“Crypto remains largely unregulated in the U.K. and high-risk,” the Financial Conduct Authority has warned.
“If something goes wrong, it is unlikely you will be protected.”
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
